TenCent’s healthcare startup Waterdrop achieves $1 billion valuation

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There are two big companies battling it out for the Chinese healthcare market, and both are backed up by two of China’s most powerful companies. Specifically, Alibaba and Tencent, two of the largest and most influential Chinese tech companies, are backing healthcare startups by the name of Xiang Hu Bao and Waterdrop, respectively. The Tencent-backed startup, Waterdrop, recently achieved a valuation of over $1 billion, reports Bloomberg.

Waterdrop Mutual is a software platform where users chip in to financially aid those diagnosed with critical illness. There are some restrictions involved, as infants under 28 days old and senior citizens over the age of 65 cannot participate. Waterdrop Mutual also requires a minimum deposit of 1 yuan, as well. The startup boasts over 2,000 employees that focus on approving and examining claims, as well.

Waterdrop Mutual has raised 500 million yuan (around $74,240,000 USD) from some well-known venture capital firms. It is unclear how much money that Waterdrop plans on raising at the new $1 billion valuation. Waterdrop is a startup that is only three years old, which makes the feat that much more impressive.

The company’s new round of money will be used to look into both blockchain-based and automation-based possibilities for the platform. This is not the first time Tencent has explored blockchain, as it partnered up recently with the local Schenzen government to use blockchain-based solutions for transport invoicing.

Waterdrop is the not the only startup in the space. Some of Waterdrop’s biggest competition stems from Ant Financial’s Xiang Hu Bao, which has already signed up 50 million users. While Waterdrop boasts somewhere around 70 million users, Xiang Hu Bao is growing rapidly considering that it is only several months old. It also doesn’t require a minimum deposit, unlike Waterdrop.

The founder and CEO of Waterdrop, Shen Peng, estimates that there are already 50 companies in the space and that they are providing a much-needed service. He even believes that the competition “cuts our cost and time for educating users.”

China is facing a rapidly aging population, as well, with many believing that aging parts of the population and the gap in the medical coverage are two of the superpower’s most relevant issues. Peng adds about Waterdrop’s role in society: “We see ourselves as a supplement to traditional commercial insurance.”